County budget moves forward

The budget committee addresses issues related to an agreement with Baker City concerning the collection of transient lodging taxes

After deliberations and discussions spanning three budget meetings and a special session, the county budget committee has approved the 2017-18 fiscal year budget.

At a budget meeting Wednesday, budget issues regarding transient lodging tax (TLT) revenues tied to an agreement with Baker City were resolved contingent upon the Baker City Council’s approval to re-enter an agreement it has with the county concerning the collection of transient lodging taxes.

Last month the city sent a letter revoking that agreement with the county, which allowed the county to collect the revenues from lodging establishments in the city.

Per the agreement that dates to May 2006, the county collects the tax, which motels, bed and breakfasts and RV parks charge their guests. The tax is 7 percent of the room or space rate, and will amount to about $490,000 for the fiscal year that ends July 1 and a projected $513,000 for the coming fiscal year. The county keeps 5 percent of the total taxes collected as an administrative fee.

The county ordinance that authorizes the lodging tax mandates that the remaining 95 percent of revenue is used for economic development (25 percent) and tourism promotion (70 percent).

The city revoked the agreement so it can handle tax collections and keep the 5-percent administrative fee that the county has been receiving. That will boost the city’s revenue by about $20,000, and is part of the city’s effort to bridge a $500,000 revenue gap for its 2017-18 budget.

That produced a dilemma for the county, which left the budget board unable to finalize its budget at a May 31 meeting.

At issue was the loss of the revenue from the administrative fee that paid for the administration of the marketing and economic development departments. Additionally the city is taking an $88,000 share of the economic development portion of TLT revenues. The money would be used to fund the city’s community development position.

That action prompted the budget board to table finalizing the budget until the issue could be worked out with the city.

Before Wednesday’s meeting Commissioner Bruce Nichols and Christena Cook, the county’s administrative services director who prepares its budget, met with Baker City Manager Fred Warner Jr. to work out a solution.

Cook reported that Warner was willing to recommend to the City Council that the city reverse its decision to break away from the TLT collection agreement and rescind the letter sent in May.

“(Warner’s) inclination is to leave the collection of the TLT taxes to us (the county),” Cook said. “And we would continue to do all the support for the TLT committee, which includes minutes, collections (of TLT taxes), distributions of all their grant fundings and paying all their bills for marketing and paying all their contract agreements.”

Another part of the county’s budget equation is the funding of a part-time staff position from the county’s economic development fund that is paid for partly with $45,000 in video lottery dollars (that must be used for economic development per state law) the county receives and puts in the fund.

The purpose of the natural resources position is to assist Commissioner Bill Harvey in natural resource development by coordinating with federal agencies and in applying for federal grants that (if awarded) would help in the hiring of work crews to perform fire reduction work for landowners through a costshare program.

In a letter to the commissioners and budget board that was part of the meeting materials, the joint city and county economic development committee recommended that the position be cut because of the $88,000 the city is taking from the economic development fund.

Commissioners estimated the position plus costs related to it are about $35,000.

The budget committee decided the position was valuable enough to retain, but voted to remove it from the economic development fund and place it in a separate economic development department in the general fund. Committee members also reduced the transfer of video lottery funds by $17,500 to the economic development fund (for a net transfer of $27,500) and used $17,500 from an insurance fund that has a current balance of $371,000. The fund is where dollars are placed that the county realizes from savings related to an insurance program that lowers the county’s premiums by 25 percent if no claims are made in a certain period of time. If there are claims, then the county must repay the premium savings back to its insurance carrier out of the fund.

The reduced transfer to the economic development fund and the monies from the insurance fund (totaling $35,000) will pay for the natural resources position.

Nichols had originally made a motion to leave all of the video lottery funds in the economic development fund, but Commissioner Mark Bennett modified the motion to use $17,500 for the natural resources position along with the $17,500 from the insurance fund.

Harvey advocated to fund the natural resources position with the video lottery dollars only.